Pharmacy retained margin funding £120m less than decade ago

The National Pharmacy Association (NPA) has said the government must “grip” the issue of funding cuts after the Department of Health and Social Care (DH) confirmed that retained margin funding for pharmacies in England is £120m less in real terms than it was a decade ago.

Responding to a parliamentary question from Liberal Democrat MP Helen Morgan last week, pharmacy minister Stephen Kinnock said the real-terms value of retained margins funding for 2025/26 is £900m, compared to £1.02bn in 2015/16.

This is despite the nominal value of funding through retained margins - the profit pharmacies can make by purchasing drugs cost-effectively - increasing by £100m as part of the 2025/26 pharmacy contract.

Kinnock noted in his response that for 2025/26, the DH provided an “additional £193 million in funding” via “writing off over-delivery”.

“Not sustainable”

NPA chief executive Henry Gregg told C+D the figures are “yet more evidence of the scale of the cuts that have impacted pharmacies for far too long” and “the size of the challenge this government inherited”.

“We have been clear that relying on the pension pots and personal savings of individual pharmacy owners to prop up a vital NHS service that millions of patients use each day is simply not sustainable,” he added.

He said the government “must grip this issue and provide sustained, long-term investment in community pharmacy, as well as long overdue reform of a fundamentally broken contract with the NHS”.

“By placing the pharmacy network on a sustainable footing, we can end the cuts and deliver an expanded range of services to patients, delivering on the government’s 10-year plan ambitions.”

It comes after the DH confirmed that total funding for pharmacies in England is £800m less in real terms than it was a decade ago.

And it follows Community Pharmacy England announcing last month that negotiations on pharmacy’s 2026/27 funding contract have commenced.